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On 21st May, a little under a month from now, Australians will elect the 47th Parliament. You’ve heard a great deal about the choices which will face Australia on that day, on national security, on the economy, on the fairness of our society. You are possibly also a little fatigued or even bewildered by the 24-hour grind of news, advertising and spin.
I’d like to provide some cut-through on one particular topic: cryptocurrency.
I have been invited to address this forum on what our hosts have dubbed the ‘Bragg Report’; formally, the Final Report of the Senate Select Committee on Australia as a Technology and Financial Centre. While a bureaucratic-sounding policy document may sound far removed from the gravel of an election campaign, this report - from initiation to development to adoption - would have only been possible under a Coalition Government. That fact alone highlights fundamental differences between the Coalition and Labor
I have always believed that the role of the Government is to facilitate, rather than direct, the market. Governments have a role in setting the rules of the game and levelling the playing field. But governments are wasting their time when they try to settle the score.
The Coalition has always, and will always, stand for the individual, and for the right of the individual to engage in private enterprise, to be treated fairly, and to make their own decisions.
It was in my capacity as Chair of the Fintech Committee that I first encountered the world of Digital Assets. It was clear from the outset that this posed a significant challenge for policymakers.
On one hand, we saw the promise of trustless, decentralised, and peer-to-peer digital markets. The core institutions of the market economy - banks, corporations, financial markets - face existential disruption.
While the Australian people recognised this, with roughly 20% reporting investments in digital assets, Australian regulators did not.
There was no framework whatsoever for consumers or investors. The regulations which did apply to digital assets had been designed for traditional finance. The result was that investors and consumers were operating according to rules which were unclear, haphazard, ineffective and burdensome. Our nearest competitors - Singapore, the United States, the United Kingdom, Canada and the European Union, had all, to varying degrees, identified digital assets as a core policy priority.
Australia was facing an exodus of investment and talent. An exodus we could not - and can not - afford.
From initiation to execution, the Government has been willing to listen and act on a matter of critical national importance. It shows that this Government is serious about attracting and retaining investment and talent.
It also shows there are fundamental differences in how the Coalition and the Labor Party approach policy. The contrast could not be more stark.
The ALP’s last - and to my awareness only - policy announcement on this issue was in 2019 - some THREE years ago - before the last election. Shadow Innovation Minister Ed Husic announced a dismal $3 million commitment to create a blockchain academy in Perth. Like their 2019 campaign, this announcement was thrown into the dustbin of obscurity.
Despite the fact this Government has put forward a bold and comprehensive reform agenda, we have heard nothing from the ALP beyond tired and hollow anti-market populism.
The difference is partly down to fundamental differences in values.
According to Stephen Jones, the shadow financial services minister, the Coalition has turned Australia into a ‘scammers paradise’ citing losses to crypto scams. Crypto constitutes a quote - ‘massive loophole for money laundering’ and ‘the Government is encouraging Australians to swim outside the flags… they’re liable for an accident that occurs as a result’.
Stephen Jones has stated that securing ‘safety and transparency’ will ‘inevitably’ lead to ‘more regulation’.
While Mr Jones, AKA the member for industry super, has been focused on imposing ‘more regulation’, we have been focusing on good regulation.
Regulation which creates certainty while inviting the possibility of more innovation, including innovation which we cannot anticipate. Regulation which protects the interests of consumers and investors on a level playing field – while allowing for flexibility, inventiveness, and experimentation. Regulation which provides a safety net when the market fails but holds individuals accountable for the consequences of their actions.
The Australian Labor Party’s distrust of the individual does not just apply to individual people and businesses. It applies to their own party members and even their own elected representatives. The ALP’s centralised structure only allows for disagreements behind closed doors. Crossing the floor, under their caucus rules, can lead to expulsion from the party. Absurdly, all members of the party must pledge their allegiance to a constitution which, in 2022, identifies ‘the democratic socialisation of industry, production, distribution and exchange’ as their core objective.
The Coalition is an exceedingly broad church. Members of my party room represent communities from Durack and Leichhardt to Kooyong and Wentworth. They come from all walks of life: business people, lawyers, farmers, doctors. And they represent a broad spectrum of views.
In the day-to-day grind of the 24 hour news cycle, this can seem like a weakness - but it is actually our strength.
This report is a testament to that strength. While I am a member of parliament and a member of the coalition, I am not a member of the Executive Government. Nonetheless, when I saw a policy problem, I was able to apply myself to it and propose a solution.
As a Senator, the best available levers came from the Select Committee system. This process, while not exactly sexy or headline grabbing, is a critical feature of our democracy.
From May until June 2021, we received and reviewed 88 submissions. In August and September, we heard testimony from 71 witnesses across three hearing days conducted during the Sydney lockdown. In October, we tabled the Final Report. The Final Report made 12 recommendations, which were aimed toward our goal of having a clear, certain, contiguous, and comprehensive structure for the regulation of digital assets.
Barely two months later, the Treasurer, the Hon Josh Frydenberg MP, announced that the Government would be agreeing to or noting 11 of the 12 recommendations. The Treasurer committed to a formal timetable. By mid-2022, the Government would have completed consultation or received advice on custody, markets licensing, and debanking. By end-2022, the Government will have completed the Board of Taxation review, completed a token-mapping exercise, and completed consultation on DAOs.
Then, my office led engagement, convening roundtable discussions on five major areas of policy: markets licensing, custody, DAOs, debanking, and tax and tokens. 58 experts, industry leaders, academics, lawyers, and representatives from Government came to the table.
We reported back to the Treasurer on the findings from that process. By March, Treasury, the Board of Taxation, and the Council of Financial Regulators had released their formal consultation papers.
After nine years in opposition, the opposition have had nothing to say about a once-in-a-century economic transformation. When the Select Committee tabled its report, we set out our proposals in detail over 144 pages of analysis. By contrast, Labor Senators on the Committee provided one page and just 300 words of additional comments. These comments provided a surface-level restatement of the main recommendations, highlighting the fact that ‘scams based on crypto asset product offerings’ were a significant problem.
I doubt that this could have occurred under an ALP Government. Their strict, directed, and top-down system of party discipline does not give Members of Parliament latitude to explore policy beyond the agreed platform. We see openness as an opportunity, they see it as a threat. When I saw a problem - the lack of a clear framework for digital assets - I was able to take the initiative and propose policies to solve it. While the Senate Committee system is one of the most important levers in our democracy, one which assists in the formation of Government policy, the ALP see it as a challenge to their centralised control of the caucus. This is why we have a clear and comprehensive plan for the regulation of digital assets - and why the other side doesn’t.
Charlotte Mortlock 0401 392 624